The storage market, like every other business, was born out necessity. People always have stuff so it is important to have storage space. There are historical records showing that public storage was available for Ancient China. The need for secure storage has increased over the years. Florida built the modern storage facility that we see today in late 1950. Each year has seen an increase in self-storage units. In 1990, storage demand outpaced supply to the point that it was at its peak. This resulted in the US building more facilities. The New York Times published in 2009, “The Self Storage Self”, that there were more than 3000 new storage units each year between 2000 and 2005. Storage is in great demand. According to the Self Storage Association of America, (SSA), self-storage companies in the US offer 2.3 Billion square footage. This total square footage is three times greater than Manhattan! One in ten US households has storage, read related site.
These statistics may be enough to inspire you to get a piece in the self-storage market. What is it like to make this happen, and what are the benefits?
Research and find the right location to start your storage business. Your success in self-storage is directly tied to the location. It is important to consider the cost of the location, as well as any property taxes or regulations. Research is essential before you decide to purchase an existing storage facility. Many self storage units that were built in the past decade were owned either by landowners or entrepreneurs who had extensive land. These facilities are not the best investments as they are located in areas that are densely populated. This can limit the potential clients. It will boost the value of your business and increase your chances of earning a higher return. The first 12 months will bring you a 6.75% return on investment.
A substantial initial capital investment is required to start a self-storage business. There are national lenders that offer financing. Many professionals recommend Wells Fargo’s Self-Storage Division. Wells Fargo has programs that can be used for self-storage businesses. One program is called the mini-perm. This program offers you two years of interest while you are starting your project. There is then three years’ amortization. The payments increase as your debt coverage level is reached. This loan is our top choice. Miniperm loans are worth considering. It takes less than one year to build your project. It could take several years to fill your units. It would be very difficult to find a loan after construction is complete.